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Essential bookkeeping practices for start-ups

Starting a new business is exciting, but it also comes with its fair share of responsibilities. One of the most critical responsibilities is maintaining accurate records of your business transactions. From saving receipts to processing employee payroll, every money-related detail should be documented. It’s not just about keeping things tidy; it’s about understanding the financial health of your business and meeting all your tax obligations.

Don’t underestimate the basics

Some small businesses continue to rely on traditional systems, like pen, paper, and a trusty shoebox. Although it may seem outdated, this method can work well for businesses with very few transactions. These businesses might not have the latest payment technology, and could be invoicing customers or receiving immediate cash or cheque payments. In such cases, they would need to maintain a record of all receipts, past, present and future jobs, as well as a log of their customers and transactions.

Of course, if you’re serious about your business, you might want to consider using a more accurate system.

The power of spreadsheets

In the digital age, spreadsheets offer a simple and effective way for start-ups to keep track of their financial activities. When you’re just starting or operating a part-time business with a limited budget, a spreadsheet can be a cost-effective alternative. As your business grows and becomes more complex, you can transition to specific accounting software.

With a spreadsheet, you can set up a basic accounting system to track invoicing, perform calculations, and even set up a budget.

Embrace accounting software

For those more serious about their business, subscribing to accounting software might be the best option. Modern accounting software often links directly to your bank account, making it an efficient way to document all necessary transactions. It also reduces the risk of errors and offers features like generating professional invoices, tracking debts, and ensuring everything is entered accurately for your accountant at tax season.

If you opt for a cloud-based solution, you’ll enjoy real-time access to your accounts, increased data security, and the flexibility to access your financial data anytime, anywhere.

Stay on top of your cash flow

Regardless of the accounting system you choose, a good system will enable better decision-making based on real-time financial insights. Identifying cash flow trends can help drive your business growth by revealing your most profitable products and services, your biggest customers, your highest costs, and more. The ability to monitor these trends places you in a better position to improve your profits and spot potential areas of growth.

Wrapping up

As a start-up, your primary task is to evaluate your business needs and choose an accounting system that allows you to track your cash position accurately, keep precise records for tax purposes, and identify cash trends.

Consulting with your accountant can be an invaluable first step. They can offer advice on the best system to use and ensure it’s compatible with their processes. Remember, your financial records are the lifeblood of your business, and keeping them in perfect order is integral to your success.

Want to discuss what system will best suit your needs? Contact us now for advice.

Looking for a Fulham accountant for your business, or a tax advisor in London? Get in touch – we’d love to help.

e: office@londonaccountants.co   t: 0203 137 9791

Kind Regards,
The Team at London Accountants

Understanding and improving working capital

When it comes to running a thriving business, understanding and effectively managing your working capital is crucial. Essentially, working capital is the cash readily available for the day-to-day running of operations. The more protracted the business cycle, the higher the working capital requirement tends to be. Your goal? To ensure you have enough working capital on hand to cover operational expenses, with a reasonable buffer in place.

How to improve your working capital

Feeling anxious about your working capital? No worries! To improve it, let’s start by figuring out how much working capital your business actually needs. By using cash flow forecasting, you can proactively calculate when you might run out of cash and determine the minimum capital required to avoid that situation.

Ways to reduce working capital needs

The key to reducing your working capital needs revolves around cutting down on expenses. Here are some strategies to consider.

  • Limit large personal withdrawals.
  • Avoid buying major assets out of daily operating profits. Remember, there are other financing options available, such as leases or loans.
  • Refrain from overtrading, which can lead to increased overhead costs and delay customer payments.
  • Assess your inventory costs. Think twice before placing bulk orders, even if it comes with a discount.
  • Simplify payment collection. Explore mobile and online options to make it easier for customers to settle their bills.

Shortening cash cycles

Another effective strategy is to shorten your cash cycles.

  • Collect money quickly and efficiently.
  • Negotiate better terms with suppliers. Paying your bills faster than your customers are paying you can lead to an unnecessary increase in working capital.

Forecast your cash flow and profit-and-loss

Accurate cash flow forecasts can provide valuable insights into your working capital, allowing you to take proactive steps for improvement. Profit-and-loss forecasts, on the other hand, help assess future profitability, enabling you to make informed decisions about your working capital needs.

Wrapping Up

The goal is to lessen working capital concerns by understanding what it is, how much you need, and ways to improve it. Once these processes are in place, managing your working capital will become second nature, allowing you to focus on growing your business and boosting profitability.

Remember, it’s always beneficial to consult with your accountant regarding your working capital needs and possible improvement strategies.

We’re here to help – get in touch now.

Looking for a Fulham accountant for your business, or a tax advisor in London? Get in touch – we’d love to help.

e: office@londonaccountants.co   t: 0203 137 9791

Kind Regards,
The Team at London Accountants

Budgeting and cash flow forecasting: key to your business success

In the unpredictable world of business, finding a little certainty can make all the difference. While the future remains a mystery, tools such as budgeting and cash flow forecasting can significantly reduce the level of uncertainty, allowing you to anticipate challenges, learn from past events, and enhance your ability to navigate your business.

Budget vs. Cash Flow: the crucial distinction

A common misconception is that a budget and cash flow are interchangeable. In reality, a budget is a projection of future possibilities, enabling you to consider various sales and expense scenarios. On the other hand, a cash flow provides a record of actual expenses and sales revenue that flow into and out of your business each month. Although they often deal with the same data, their applications differ. You might budget $1,000/month for online costs, whereas in the cash flow, you’d record the actual amount spent. Despite their distinct uses, cash flow and budgeting are often maintained on the same spreadsheet or similar accounting software for ease of use and comparison.

The advantages of budgeting and cash flow forecasting

The benefits of incorporating budgeting and cash flow forecasting in your business are numerous. They help predict and manage potential cash surpluses or shortages, plan for tax obligations, time new equipment purchases, determine when to buy in bulk, and even identify when you might need a small business loan or a line of credit.

One particularly useful feature is the ability to track expenses and highlight any unusual cost increases or decreases. This allows you to take prompt action to address the issue. Additionally, these tools can help monitor sales levels and flag any underperforming areas of your business.

Practical tips for effective budgeting

Preparing an annual budget requires sufficient time – allocate at least two or three months for this process. Update your budget each month based on the actual cash flow. Keep in mind that the sales forecast is often the hardest part to get right. If you’re new to business, examine separate forecasts for different products or geographical areas and note any seasonal patterns in your business and industry.

Sensitivity analysis: a proactive approach

A sensitivity analysis, often referred to as ‘what if’ scenarios, can help you understand how different outcomes affect business performance. This analysis allows you to review the effects of changes in your revenue or costs. For example, if one customer contributes thirty percent of your turnover, what would happen if they stopped buying from you?

The power of regular updates

Regularly comparing your actual expenditure against your budget enhances your ability to predict future costs accurately. It’s good practice to review and update your budget and cash flow forecasts at least once a month, or more frequently if your business environment is changing quickly.

Budgeting and cash flow forecasting are powerful management tools that can guide your business decisions. However, their value lies in their regular review and updating, ensuring their figures remain current and reflective of your business’s financial health.

Contact us now for help with budgeting and cash flow for your business.

Looking for a Fulham accountant for your business, or a tax advisor in London? Get in touch – we’d love to help.

e: office@londonaccountants.co   t: 0203 137 9791

Kind Regards,
The Team at London Accountants

5 Apps for Tracking Small Business Expenses

Did you know that 50% of small business expenses are generated on the go? It’s no wonder the majority of expense receipts end up shoved in coat pockets or an old shoebox.

In spite of all of the high-tech options out there, 47% of small businesses are still using spreadsheets for expense management, leaving room for errors that could really hurt their bottom line come tax time.

Why not take the uncertainty and disorganization out of expense tracking by going mobile?

These five apps can be used anywhere, anytime, to ensure no penny goes unlogged or unclaimed.

1. Dext: eliminate data entry

With Dext, you can easily do away with expense-related data entry altogether. Simply snap a photo of your receipt and submit it for processing; the app automatically extracts all relevant data including vendor, total amount, payment method, and date.

Dext also integrates with Xero, QuickBooks, Sage 50, FreeAgent, and Kashflow accounting software to streamline your bookkeeping.

Dext must be doing something right because this app has earned high praise, including Xero’s 2015 ‘Add-on of the Year’ award (UK winner).

2. Avaza: 5-in-one functionality

Australian software company, Avaza, recently announced a brand new app that combines project management, collaboration, time tracking, expense, and invoice management.

Users can opt for a single feature, or select all five for streamlined, on the go business management.

Some features of this app include:

  • Daily and weekly timesheets;
  • Per-person and per-category billable rates;
  • Flexible tax configuration; and
  • Trackable expenses and attachable receipts.

3. iClaimIt: mileage tracking made simple

iClaimIt is a straightforward, simple to use tool designed to help UK-based “road warriors” log their miles more easily and accurately.

When travelling by car iClaimIt makes it a snap to record mileage with a click of a button and email your expense and mileage data as a CSV file.

As a bonus feature, this app also supports a simple receipt-capturing feature. Just attach a photo of each receipt to the corresponding expense to organize your fuel receipts and other travel expenses.

4. Expensify: your “virtual accountant”

Expensify makes it easy to capture receipts, record business-related mileage, log billable hours, and more. Stand-out features of this app include:

  • SmartScan technology that “reads” your receipt and creates an expense automatically;
  • GPS mileage tracking to automatically calculate distance traveled for work;
  • Bank and credit card import (the app can automatically pull all your business transactions into your Expensify account).

Budget-conscious business owners take note: Expensify’s SmartScan feature allows 10 free scans per month.

5. Shoeboxed: the “ultimate receipt-manager”

Like Receipt Bank, Shoeboxed allows you to snap a picture of your receipt, and then the app extracts vital information for you. This tool also allows you to create an expense report on your phone in a matter of seconds, using your stored images.

Another great feature is a searchable, categorized archive of logged receipts, which facilitates expense-exporting into QuickBooks, Wave Accounting, Excel, Outright, and Xero.

With mobile apps like these, you’ll never lose track of a receipt or claimable expense ever again. Here’s to building your business with smart technology that moves as quickly as you do!

Looking for a Fulham accountant for your business, or a tax advisor in London? Get in touch – we’d love to help.

e: office@londonaccountants.co   t: 0203 137 9791

Kind Regards,
The Team at London Accountants

4 Benefits to Hiring a Bookkeeper for your business

4 Benefits to Hiring a Bookkeeper for your business! 

I mean…we may be bias, but bookkeepers can be highly beneficial for businesses of any size. We offer expertise and insight into areas that you may not have experience in. We also take some tasks off your to-do list, freeing up your time and energy to focus on other matters – running your business!

Here are 4 benefits to hiring bookkeepers to help you manage your business.


A bookkeeper is an expert at managing, sorting and recording your business’s financial transactions. We’ve spent time developing our skills and experience. During that time, we’ve also seen and resolved bookkeeping-related issues that you may come up against. Our expertise makes us more efficient at managing those issues.

Beyond that, we understand business trends and challenges others in your industry face, and can help you move through those as well. We also know what questions to ask to help you make important decisions and can share best practices with you.


Your bookkeeper not only helps you maintain accurate records, they understand your financial circumstances. They help you assess how to make important business decisions, such as whether now is a good time to grow or when you should hold back. They can also identify trends in your industry and help you take advantage of those opportunities.

Finally, they can assist you with budgeting, and sticking to your budget. They’ll help you come up with a realistic financial plan that enables your business to grow while achieving short- and long-term goals.

Time savings:

As a business owner, you likely have many activities to focus on. In bookkeeping alone there are numerous tasks to be responsible for, such as:

  • Collecting and recording transaction data
  • Sorting receipts
  • Classifying expenses
  • Invoicing customers
  • Paying vendors
  • Managing payroll.

Bookkeepers take on those tasks so you don’t have to. It’s not just about the energy you put into them, it’s about the fact that unless you’re an expert at bookkeeping, it’ll likely take you longer to complete these activities than it would take a bookkeeper.

Think of the time you spend during an average week managing your books, then think of the time you spend during a high-pressure week, such as during tax season. That can add up to a lot of extra hours.

By hiring a bookkeeper, you save yourself that valuable time for other activities such as marketing, perfecting your products or even spending time with family.

Money savings:

There’s a time cost to doing your own books, but there’s also a potential money cost in the form of missed opportunities. The time you spend doing your own books is time you could potentially be out creating or taking advantage of new opportunities for your business.

Your bookkeeper frees you up so you have the time and energy to identify potential opportunities. They can also advise you on whether you’re in a fiscal position to jump on those possibilities.

Additionally, the expertise bookkeepers bring to their activities means they’re likely to save you from costly mistakes that could affect your finances.

Final Thoughts

Hiring a bookkeeper is a sound business decision as it gives you access to expertise and guidance you might not otherwise have, and it frees up your time and money to take advantage of other business opportunities.

If you are looking for Fulham accountants or a tax advisor in London, get in touch!

e: office@londonaccountants.co   t: 0203 137 9791

Kind Regards,
The Team at London Accountants

Inflation sees hike in vehicle-related benefit charges

Inflation sees hike in vehicle-related benefit charges!

Certain benefits, including those related to company-owned vehicles, are revised annually to reflect inflation. The relevant figures for 2023/24 have just been confirmed…

What do you need to know?

The consumer price index is the benchmark the government uses to measure inflation. This is linked to several key figures for the purposes of calculating the cash equivalent to establish the taxable benefits in kind. Three of these figures relate to company-owned vehicles where there is some element of private usage.

Firstly, there is a fuel benefit where an employer provides petrol or diesel to an employee that is used for private journeys. There is no de minimis, so a small amount of fuel provided and not reimbursed by the employee is enough to trigger the benefit. The cash equivalent is worked out by multiplying the appropriate percentage for the car by a fixed fuel benefit multiplier. For 2022/23 this is £25,300, but due to high inflation this will increase to £27,800 from April 2023. A jump of £2,500.00!

Next, there is the company van benefit. This is a fixed amount, i.e. there is no variance depending on the van’s emissions level. If the van is used for private journeys, and this usage is not “insignificant”, the employee will be taxed on a fixed cash equivalent. For 2022/23 this is £3,600, and will increase to £3,960 from April 2023.

Finally, if fuel provided by the employer is used for private journeys, the employer will be taxed on a fixed cash equivalent of £688 for 2022/23, rising to £757 from April 2023.

We are also currently running a promotion until 1st January 2023.

£225 + VAT for a basic Self-Assessment Tax Return (usually £299 + VAT)

Offer is valid until 01.12.2022.

e: office@londonaccountants.co   t: 0203 137 9791

Kind Regards,
The Team at London Accountants

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Time to pay arrangements (TTP) are now much easier to agree!

Time to pay arrangements (TTP) are now much easier to agree!

Agreeing a time to pay (TTP) arrangement used to involve calling HMRC and convincing them that you were struggling to pay. The agreement was often made grudgingly. This stance has softened in recent years, and there may be no need to make a call at all.

So, what do you need to know?

TTP arrangements are informal agreements between the taxpayer and HMRC in situations where the self-assessment bill can’t be paid in full by the deadline. Instead, the TTP arrangement allows the bill to be spread across monthly instalments by direct debit.

Previously, TTP arrangements could only be set up by calling the self-assessment helpline, explaining the circumstances, and making a case for it. Taxpayers would often find HMRC reluctant to agree a payment period of more than a few months. The advent of the pandemic and the cost of living crisis has changed this.

It’s now possible to set up a TTP arrangement online with no need to make a call. This will be possible if you:

  • have filed your tax return
  • are within 60 days of the payment deadline
  • owe less than £30,000; and
  • can pay in full within twelve months.

Guidance on how to set this up is available online. Note that late payment interest will be charged, but no late payment penalties. As interest rates are steadily increasing, paying sooner rather than later is recommended wherever possible.

You will need to have your tax return done before applying for TTP arrangements. We are currently running a promotion until 1st December 2022.

£225 + VAT for a basic Self-Assessment Tax Return (usually £299 + VAT)

Offer is valid until 01.12.2022.

e: office@londonaccountants.co   t: 0203 137 9791

Kind Regards,
The Team at London Accountants

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How to set payment terms if you’re a freelancer or contractor

How to set payment terms if you’re a freelancer or contractor!

Following up on late or non-paying customers is no freelancer’s favourite task. Which is precisely why you need to set payment terms up front (and in writing!) before you work with a new client or customer.

By communicating and agreeing on the non-negotiables for doing business with you, you’ll avoid awkward misunderstandings, frustrating disputes, and in most cases, the ugly hassle of debt collection.

These tips will help you pave the way for consistent cash flow by setting clear payment terms.

Minimum legal requirements:

As a business owner you are only required to include your business name and address on your invoices. But it’s in your best interest to include more information than the law requires.

It’s recommended that every invoice include:

1. The invoice date
2. Complete contact info
3. Payment instructions (i.e. acceptable forms of payment and when payment is due)
4. An itemisation of services

If you haven’t shared your payment terms in writing and a client won’t pay, you have little recourse. You won’t be able to charge a late payer interest on their balance owing, let alone engage the services of a debt collection agency.

In addition to including your payment terms in clear and simple language on every invoice, be sure to state your payment terms early on.

Send along your policies in an email, include them in an agreement or contract, and/or point new clients to the terms and conditions outlined on your website.

What to include in your payment terms:

It’s up to every entrepreneur to decide when and how much they need to be paid in order to operate a smooth, positive cash flow business.

As a starting point when setting payment terms, think of the troubles you’d like to avoid and how you could prevent them with the right policies.

In addition to when payment is due (i.e. on receipt of invoice, Net10, Net30) you might want to include:

1. Pre-payment requirements (i.e. a full or partial deposit)
2. Incentives for early payment (e.g. “Net30” means clients get a 2% discount on invoices due in 30 days if paid within 10 days)
3. Late payment fees (e.g. 2% on the balance, accruing monthly)

You might also include a description of the products or services offered, delivery timelines, a reminder of the terms of your agreement, and what will happen if either party doesn’t stick to the policies in place.

Final thoughts

For freelancers and contractors, requiring pre-payment in the form of a full or partial deposit can really help avoid the “feast or famine” cash flow cycle.

It can feel a bit intimidating to ask for payment before you’ve completed the work but think of it as a client screening process. After all, it’s only the ones who understand you are offering a valuable service and are willing to pay for it that you want to work with.

As a secondary benefit, when clients invest up front they understand they are working with a professional and act accordingly. And if it turns out you do have a few late paying customers from time to time, those deposits you’ve collected will ensure you have the cash to carry you through.

If you are looking for Fulham accountants or a tax advisor in London, get in touch!

e: office@londonaccountants.co   t: 0203 137 9791

Kind Regards,
The Team at London Accountants

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Why your business needs you to say no

Benefits of using technology!

These days, you can use technology to take care of almost any issue facing your business. If you have a task you don’t like to do, there’s an app or software program to take care of it for you. 

Being open to new possibilities is a positive trait shared by most entrepreneurs. But saying yes to all the people you meet and opportunities that come your way can get you into trouble.

When we overcommit (especially when we take on projects that don’t actually benefit our business) our stress can hit the roof. It’s much hard to be productive when we’re feeling burned out and resentful.

One of the most impactful changes you can make in your business is to form one simple habit: give yourself time to weigh the cost and benefit before making any decision, and politely decline any opportunity that doesn’t align with your goals.

If you’re feeling stressed and less productive than you’d like, it’s time to get better at saying no. Here’s how:

Check your business plan!

Your business plan is more than a record of the year’s goals and projections. It’s a living document designed to help you guide your business in the direction you want it to go.

Although some decisions may seem small (an invitation to coffee, a request for advice), all of those “asks” add up. In order to stay focused on the success of your business, you need to always keep your short and long term goals in mind.

If you don’t have a business plan (or it’s been some time since you wrote one), any of these free small business plan templates can help you get clear on where you want to take your business – and how you’ll get there.

Make a thoughtful decision:

If someone’s request does not help your business, your decision is easy. If you may want to work with the person in the future, or there’s something you can ask in return that will benefit your company, a definite maybe is in order.

Before you say yes ask yourself the following questions:
How does agreeing to this benefit my business? How important is that benefit at this time or in the future?
Do I have the capacity to carry out this request at this time? How might other aspects of my business suffer if I prioritise this request?
What does my gut say? Will I feel burdened, owed a favour, or for any other reason resent saying yes to this request?

Scripts for saying no:

If you’ve weighed the decision and need to turn someone down, these simple phrases can help you to say no gracefully.
Thank you for thinking of me but I can’t take on another project right now.
I’d like to help you but I have other commitments.
A healthy balance at work at home is my priority at the moment. I know this is a small request but I can’t be of service right now.
I’m sorry I can’t do what you’ve asked, but I can do this for you if it helps.
I’m unable to help you now, but perhaps another time.

Notice that specific reasons given for declining a request aren’t offered. You don’t need to give a list of excuses for saying no, which can sound unconvincing. 

Unfortunately when offered reasons for refusing a request, some people will add pressure by trying to challenge them.

Final thoughts

When you become skilled at saying no, you’ll not only avoid additional stress, you’ll have more time to spend doing meaningful work you enjoy, building a business you love.

One final thought: if the thought of saying no still fills you with dread, don’t think of it as saying no. Think of it as saying an enthusiastic “yes” to you and the success of your business.

Kind Regards,

The Team at London Accountants

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